Rental properties such as real estate properties like apartments and houses are great investments. Renting out properties provide you with a consistent passive income that can be very helpful, especially if you are already retired.
Real estate is a lucrative business but if you do not know what you are doing, you may fail in making a profit that most successful landlords get out of renting their properties. If you are having a hard time making profit, here are some tips on how to gain more return from your rental properties:
- Make your rental property move-in ready.
Nothing attracts tenants more than a move-in ready rental property. Whether you are renting out an apartment or a pad, it is important that when a possible tenant checks out the property, it is move-in ready. Therefore, the property must be cleaned out and appliances are working properly. If some furnishings need replacement, then they must be immediately replaced. Necessary structural repairs or enhancements must also be done immediately.
The best way to make your property move-in ready as fast as possible is by discreetly and thoroughly checking the place before the tenant moves out. Take note of the necessary repairs, enhancements, and replacements. Once you have the list, look for contractors that will work on it when the tenant moves out as scheduled.
- Create an effective marketing strategy.
A landlord’s worst headache is an empty rental property. A rental property with no tenant means a loss of profits. To prevent empty rental properties, you must market the property properly and to the right people.
For example, if your property is located near a university, your most ideal tenants would be university students or employees of the university. So to target your audience, you must put your marketing materials, like fliers and posters, in places or near the places where students and employees often gather, like a café or a pub.
If your rental property is in a residential area, then an ideal tenant would be families looking for a home to rent. So to reach this audience, you can work with real estate brokers or other relevant real estate professionals. Listing your property online will also be helpful since people often use the internet to look for available properties for rent. You can list your property in an online marketplace, but make sure to read reviews about the website first. You can check out this Roofstock review to get an idea.
- Screen your possible tenants.
One of the biggest mistakes any landlord or property owner can make is not screening a potential tenant. A tenant with a bad record can cause you a lot of trouble and loss of profit.
Before renting out your property, make sure that you have done your due diligence. Check the potential tenant’s credit record, any records of eviction, criminal history, and rental history. Most of all, verify that they are employed or have a steady income that can afford your monthly rent.
- Check on the property every now and then.
Even if you think you have found the perfect tenant, it is still better to check on your property every now and then to see if they have been doing their part in taking care of the property you are renting out. This is especially necessary if you are renting out your property to university students.
Checking out the property every now and then will also allow you to see if there are any minor repairs that need to be done. Depending on the contract you have with your tenant, this can also be your chance to perform maintenance duties like mowing the lawn, trimming the garden, and so on.
- Provide solutions to small problems immediately.
When small problems are disregarded, they can easily become huge problems that cost more money. So when your tenants call you regarding some minor issues on the property, make sure that you act on it and provide solutions immediately. Doing so will endear you to your tenants and you can prevent a small, inexpensive repair from turning to big and costly problem.
- Raise your rental cost appropriately.
Raising your rental cost is one of the surefire ways to increase your return from your rental property. However, you must do so appropriately. If you are increasing your rent at the cost of losing a tenant, then it is not worth it.
The best way to determine whether it is time for you to increase your rent is by checking the cost of rent of properties similar to yours around the area where your property is located. If the cost of your rent is significantly cheaper, then it is time to increase it.
- Prevent frequent tenant turnover.
When your tenants are frequently leaving and don’t stay for long, then you are probably losing more money than profiting from your property.
To prevent this from happening, and to encourage your tenants to stay, you should practice an open communication rule. Make yourself available when your tenants have something to say. You should also incentivise your tenants like giving rebates when they pay the rent ahead of time, or when they do or spend for the repairs in the property. Having tenants who stay in your property longer can increase your return in the long run.
- Enforce late rent payment fees.
Although it would be better if you treat your tenants in a friendly manner, you should also make sure that they know that you mean business. It is your responsibility as the property owner to collect the rent on time and it is their responsibility as the tenants to pay on time.
Enforcing late payment fees can surely increase your gains and it will also encourage your tenants to pay on time, so make sure that this clause is included in your contract. Of course, you should be understanding and provide a grace period. After all, your tenants may be going through a rough patch in their life. After a week or two of grace period, depending on the terms included in your contract, you should collect an additional late payment fee on top of the monthly rent.
A landlord or a property owner may have a lot of responsibilities, but it cannot be denied that investing in real estate rental property can be very profitable if you do it right.